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Irregularities Discovered in Charge Card Usage at Federal Agency, Reports Reveal

Federal auditors have uncovered irregularities related to government-issued charge cards at the Immigration and Refugee Board of Canada (IRB), saying there were instances of transactions being billed without proper approval procedure.

“In some cases, for acquisition cards and contracting, it could not be determined whether the expense was approved prior to the expense being incurred or prior to the signing of the contract as the approval was not dated,” said the “Core Control Audit” report, released on June 29 and first covered by Blacklock’s Reporter.

“In all instances, for acquisition cards, no documentation was on file to demonstrate that commitments were recorded at the value expected to be incurred.”

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The audit was meant to examine whether IRB manages its finances in compliance with the requirements set forth by the Treasury Board of Canada Secretariat. The random check found not only missing records but applications for the cards that were not signed by the designated authority.

“For acquisition cards, in all instances, the acquisition card application form was not signed by the acquisition card coordinator, which is a responsibility of this role,” auditors wrote.

The same goes for the control of spending limits where there were no official documents to match against the amount indicated in the application forms.

“[I]n many cases, although the cost centre manager recommended for the employee to have an acquisition card with reasonable credit limit based on planned use, there was no bank statement documentation indicating the credit limit to verify that it matches the limit noted in the acquisition card application form,” the report said.

“Additionally, although the cost centre manager recommended for the employee to have an acquisition card, in two cases, there was no recommended credit limit on the acquisition card application form.”

‘High Risk Transactions’

Cabinet introduced the charge card system in 1992 to simplify ordinary federal purchases for office supplies. Only 2,000 cards were issued at the time to employees who received mandatory training. The number of issued cards has since grown to more than 35,000 with numerous audits identifying irregularities, according to Blacklock’s findings.

In February of this year, another federal agency was found to run up 13 percent of its 2022 budget using cards including “high risk transactions.” Auditors found that employees at the National Research Council (NRC) shared cards with coworkers who were not authorized to use them.

“[C]ertain deviations were noted including cases of contract splitting, inability to provide supporting documentation for purchases and wrong general ledger accounts attributed to a purchase,” said the report, prepared by the Office of Audit and Evaluation at NRC.

A 2018 audit at the Department of Fisheries found charge cards were used to ring up $140 million a year in purchases including at least one case of suspected fraud. In 2020, the Department of Employment failed an audit that found only 33 percent of transactions selected at random were approved. Twelve percent of transactions paid inaccurate amounts. Both audit reports were obtained and reviewed by Blacklock’s.


Employees at the Department of Foreign Affairs were also found to use government-issued charge cards to buy liquor, jewelry, and undefined “hospitality,” among other items, in a 2020 audit. Auditors selected 223 samples that covered 366 transactions.

“80 percent of the sample (179 samples out of 223) did not have documentation on the approval provided by the appropriate manager to initiate the expenditure,” said auditors in their report, titled Audit Of Use Of Acquisition Cards At Missions, released in December 2021.

“31 percent of the sample (70 of 223) had insufficient documentation to demonstrate compliance with policies and directive. In many cases, receipts and invoices alone were insufficient to determine compliance because often the context within which the transaction took place was missing.”

Diplomats’ use of charge cards abroad from 2019 to 2020 saw billings that included $117 for jewelry, another $9,826 spent on clothing, a total of $12,416 in expenses for liquor, and $14,251 in charges marked “leisure.”

Other transactions included items such as “health and beauty” at $23,009, “personal purchases” at $27,699, and “hospitality” which racked up $98,309 in bills.

Auditors noted that the diplomats’ charge cards had a $3,000 limit per transaction.

“26 percent of transactions in calendar year 2020 (10,131 out of 39,085 representing approximately $6.35M) may have been potential split purchases,” they wrote.

“7 percent of the sample (16 out of 223) were confirmed to be split purchases to circumvent the acquisition card limit.”

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